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Enclosure

Author

Listed:
  • BART TAUB
  • RUI ZHAO
Abstract
We model the development of property rights as an endogenous process, driven by capital accumulation. Property rights internalize the portion of the return to capital that is otherwise treated as common property. This enclosure further encourages capital accumulation and sustains economic growth. We view effective property rights as multilateral agreements among agents that can only be implemented and sustained when agents are sufficiently patient. Patience is determined by the marginal product of capital; the marginal product of capital shrinks, and consequently patience increases, as capital grows. Hence, property rights can be established only when an economy is rich enough. (JEL P14, O11, C73)

Suggested Citation

  • Bart Taub & Rui Zhao, 2009. "Enclosure," Economic Inquiry, Western Economic Association International, vol. 47(2), pages 377-393, April.
    • Handle: RePEc:bla:ecinqu:v:47:y:2009:i:2:p:377-393
    DOI: 10.1111/j.1465-7295.2007.00119.x
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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